Voodoo Medical Economics

From the medical doctor (and conservative pundit) Charles Krauthammer's The Great 'Prevention' Myth column in the WaPo today:

In Obamaworld, as explained by the president in his Tuesday town hall, if we pour money into primary care for diabetics instead of giving surgeons "$30,000, $40,000, $50,000" for a later amputation -- a whopper that misrepresents the surgeon's fee by a factor of at least 30 -- "that will save us money." Back on Earth, a rigorous study in the journal Circulation found that for cardiovascular diseases and diabetes, "if all the recommended prevention activities were applied with 100 percent success," the prevention would cost almost 10 times as much as the savings, increasing the country's total medical bill by 162 percent. That's because prevention applied to large populations is very expensive, as shown by another report Elmendorf cites, a definitive review in the New England Journal of Medicine of hundreds of studies that found that more than 80 percent of preventive measures added to medical costs.

The DoctoRx approach to preventive health was and is simple. Eat right and exercise. And take your statin if your doctor recommends it; the same applies to high blood pressure treatment. The life you save, extend or improve the quality of is your own.

For health and "green" reasons, consider eating as little flesh of animals with legs as possible, especially those with four legs; gilled animals (e.g. fish) are OK health-wise although overfishing is a major ecological problem.

Preventing disease is good. It costs money, as do most good things. In fact, it costs lots of money. This is in my personal opinion money better spent than on pleasure trips to wherever, and it is better for the environment. But that's just my opinion. Other people may feel that the enjoyment of a bag of junk food a day is more important to them than better health. My usual response is to persuade them to do otherwise, and I favor price incentives to change their behavior along the lines of the price disincentives for smoking cigarettes that have been shown to decrease smoking rates. So there are ways to offset the good things that flow from prevention, but they do involve taxes and other revenue enhancement measures.

If Ronald Reagan could sign on to revenue enhancements year after year, so can the wannabe transformative President named Barack Obama.

What will not work is for any President to misrepresent prevention to be a cost saving when it is, truth be told, but another worthy but costly cause. That is voodoo medical economics. It will also not do for the most powerful lawyer in America to keep on misrepresenting doctors as getting rich from doing their jobs. Doctors as a class are far more trusted than politicians, and they do a better job, too. And successful doctors can't go from practicing medicine to trade on their connections to make millions of dollars a year as successful politicians, such as Tom Daschle (who like Al Gore hit the jackpot after losing a close election) and Bill Tauzin routinely do. And Angelo Mozilo did not personally refer mere physicians to Countrywide's VIP mortgage division. Need I vent further?

Even the rare doctor who makes a seven figure income, such as the most successful plastic surgeons (who do not work for insurance/Government rates), earn chump change compared with equally hard-working people in Big Finance who the Bushbama Continuity love so much (such as all of Goldman Sachs and such as Lawrence Summers, the $5 M man for 1 day a week work for a hedge fund after being forced out of Harvard).

When I, a moderate Democrat when I started medical practice, started complaining about Hillarycare to certain patients in the quiet of my consultation room, that may have been a harbinger that that "prequel" version of "Obamacare" was foundering. Are the President's attacks against physicians tied in to a similar phenomenon now?

Wait a bit and you will know more. Sadly, your knowledge of the facts of medical economics will have to come from elsewhere than this White House.

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Obamacare Proposals: '1984'-Type Newspeak in 2009

In late 1993 and truly getting going in 1994, the President and Mrs. Clinton unveiled a "Hillarycare" proposal for a new system of financing and organizing healthcare that had the advantage of being comprehensive and the disadvantage of being so unpopular that a solidly Democratic Congress never even brought any version of the plan to a floor vote.

The early portents from the 2009 version of Big Government-provided health care are worse, especially given that Mr. Clinton had the tactical brilliance to get a large tax increase in place before proposing spending lots of money to sort of socialize health care. The current President, unwilling to wait even one year for the economy to respond to his massive "stimulus" program, has in his proposal bowed to the bond market and proposed all sorts of cutbacks in care and tax increases. Since the majority of Americans have good health care coverage now, Mr. Obama has lots of selling to do. Worse, the language used to sell the program has become, predictably and sadly, Newspeak. Cuts in care are unspecified and unachievable "savings", efficiencies, productivity gains, and the like. These cuts are large and come out of bottom-of-the-barrel Medicare/Medicaid payment rates.

Those interested in the details may want to first review the White House's summary of its proposal, titled: Paying for Health Care Reform: $313 Billion in Additional Savings to Create a Deficit Neutral Plan.

Then, as an example of the practical problems involved, check out an article by a great friend of the President, the New York Times, from today with the understated title, Health Plan May Mean Payment Cuts. (Hint: "May" is the understated word.)

Or you may want to review Bloomberg.com's article, Obama Outlines $313 Billion in Health Care Savings, from which a brief section is copied here:

White House Budget Director Peter Orszag said the additional revenue along with cuts and projected savings will cover the estimated $1 trillion cost of a health-care overhaul even if the final, total figures “are still undetermined.”

“We are making good on this promise of fully financing health care reform over the next decade,” Orszag said in a conference call with reporters yesterday.

The administration’s cost estimates are lower than those of private analysts. Gail Wilensky, a former administrator at the Centers for Medicare and Medicaid Services, has said the cost may approach $1.5 trillion and other projections are as high as $2 trillion.

Given that that the Government cannot really "fix" the economy (to the extent that this remains a free enterprise system, an assumption that looks shakier by the month), but it can "fix" the health care "system", then it is incumbent upon the majority party to pass something that it believes in, no matter what the electoral consequences are. It did nothing in 1994 and got whipped big-time anyway.

Bob Woodward reported in "The Agenda", about Bill Clinton's first year in office, that he rejected enacting catastrophic rather than comprehensive soup-to-nuts health care coverage for all Americans as not grand (grandiose?) enough, even though covering catastrophes only would have passed very easily. That would have been a camel's nose under the tent, easy to expand upon. Will the Democrats go for an all-or-none approach again? If finances do not allow a huge program now, what's wrong with incrementalism?

A new President replacing an unpopular departing one, with a fawning press corps that in some mainstream circles is now comparing him to G-d, has had things almost all his way. A less popular new President, Bill Clinton, was able in 1993 to get a not-very-popular tax increase through by the narrowest of margins.

There is no predicting what will happen next in this battle.

Copyright (C) Long Lake LLC 2009